B-164883, NOVEMBER 6, 1968, 48 COMP. GEN. 289

B-164883: Nov 6, 1968

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THE POST OFFICE DEPARTMENT PROPERLY PROCEEDED TO HAVE THE PAINTING PERFORMED UNDER CONTRACT AND UNDER ITS COMMON LAW RIGHT OF SET OFF TO WITHHOLD THE COST FROM THE RENTAL PAYMENTS DUE. THE ACTION OF THE DEPARTMENT NOT HAVING BEEN BASED ON A FINDING THAT THE PREMISES WERE "UNFIT FOR USE. " THE REMEDY TO THE GOVERNMENT WAS NOT THE TERMINATION OF THE LEASE. 1968: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 15. IT IS REPORTED THAT THE LEASE DATED APRIL 30. WAS EXECUTED BY THE POST OFFICE DEPARTMENT AND J. YOU WERE INFORMED BY THE POSTMASTER OF THE LEASED FACILITY THAT YOU WERE REQUIRED UNDER PARAGRAPH 7 OF THE LEASE TO PAINT THE INTERIOR OF THE POST OFFICE. ADVISED YOU AGAIN OF YOUR RESPONSIBILITY UNDER PARAGRAPH 7 OF THE LEASE TO PAINT THE INTERIOR WALLS OF THE LEASED PREMISES AND YOU WERE GIVEN 15 DAYS TO COMPLY WITH THE DEPARTMENTAL DEMAND.

B-164883, NOVEMBER 6, 1968, 48 COMP. GEN. 289

LEASES - REPAIRS AND IMPROVEMENTS - LESSOR'S LIABILITY THE LESSOR OF FACILITIES OCCUPIED AS A POST OFFICE OBLIGATED TO REPAINT THE INTERIOR OF THE BUILDING UNDER THE "GOOD REPAIR" PROVISION OF THE LEASE, UPON THE LESSOR'S REFUSAL TO ASSUME THE RESPONSIBILITY, THE POST OFFICE DEPARTMENT PROPERLY PROCEEDED TO HAVE THE PAINTING PERFORMED UNDER CONTRACT AND UNDER ITS COMMON LAW RIGHT OF SET OFF TO WITHHOLD THE COST FROM THE RENTAL PAYMENTS DUE. THE ACTION OF THE DEPARTMENT NOT HAVING BEEN BASED ON A FINDING THAT THE PREMISES WERE "UNFIT FOR USE," THE REMEDY TO THE GOVERNMENT WAS NOT THE TERMINATION OF THE LEASE.

TO THE BALDWIN BROTHERS, INC., NOVEMBER 6, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 15, 1968, CLAIMING THE SUM OF $750 WITHHELD FROM RENTAL PAYMENTS DUE YOU UNDER A LEASE AGREEMENT COVERING THE SOUTH ERIE STATION OF THE ERIE, PENNSYLVANIA, POST OFFICE.

IT IS REPORTED THAT THE LEASE DATED APRIL 30, 1959, WAS EXECUTED BY THE POST OFFICE DEPARTMENT AND J. ROBERT BALDWIN, RUTH D. BALDWIN, ARTHUR W. BALDWIN, AND NANCY F. BALDWIN AS LESSORS. THE LEASE PROVIDED THAT THE DEPARTMENT WOULD LEASE CERTAIN PREMISES SITUATED IN ERIE, PENNSYLVANIA, AND OWNED BY THE LESSORS, FOR A PERIOD OF 10 YEARS ATAN ANNUAL RENTAL OF $9,600. THE LEASE FURTHER PROVIDED FOR SIX 5-YEAR RENEWALS AT THE OPTION OF THE GOVERNMENT AT RENTALS RANGING FROM $9,200 TO $8,200 PER ANNUM.

BY LETTER OF MAY 9, 1966, YOU WERE INFORMED BY THE POSTMASTER OF THE LEASED FACILITY THAT YOU WERE REQUIRED UNDER PARAGRAPH 7 OF THE LEASE TO PAINT THE INTERIOR OF THE POST OFFICE. YOU TOOK EXCEPTION TO THIS REQUIREMENT IN YOUR LETTER OF MAY 10, 1966, TO THE POSTMASTER. THEREAFTER, BY CERTIFIED LETTER DATED JULY 27, 1967, THE CHIEF, REAL ESTATE BRANCH, PHILADELPHIA, ADVISED YOU AGAIN OF YOUR RESPONSIBILITY UNDER PARAGRAPH 7 OF THE LEASE TO PAINT THE INTERIOR WALLS OF THE LEASED PREMISES AND YOU WERE GIVEN 15 DAYS TO COMPLY WITH THE DEPARTMENTAL DEMAND. WHEN YOU DID NOT COMPLY WITH THIS DEMAND, AND IN ACCORDANCE WITH THE ADVICE GIVEN IN THE JULY 27 LETTER, A CONTRACT FOR THE PAINTING WAS AWARDED PURSUANT TO COMPETITIVE ADVERTISING TO A THIRD PARTY IN THE AMOUNT OF $750. THE DEPARTMENT DEDUCTED THE COST OF THE THIRD-PARTY PAINTING CONTRACT FROM RENTAL PAYMENTS DUE YOU UNDER THE LEASE, WHEREUPON YOU FILED A CLAIM FOR REFUND WITH OUR OFFICE.

IT IS YOUR BELIEF THAT SINCE THE LEASE DOES NOT SPECIFICALLY PROVIDE THAT THE PAINTING OF THE INTERIOR OF THE PREMISES IS AN OBLIGATION OF THE LESSOR, THE DEPARTMENT MAY NOT REQUIRE SUCH WORK TO BE PERFORMED AS PART OF THE LESSOR'S OBLIGATION TO MAINTAIN THE PREMISES. IN SUPPORT OF YOUR POSITION, YOU NOTE THAT AT THE TIME THE LEASE WAS NEGOTIATED THE PARTIES DID NOT SPECIFICALLY BARGAIN THAT INTERIOR PAINTING WAS TO BE THE RESPONSIBILITY OF THE LESSOR. YOU FURTHER STATE THAT AT THE TIME OF LEASE NEGOTIATIONS IT WAS NOT THE POLICY OF THE DEPARTMENT TO REDECORATE POST OFFICES AT 5-YEAR INTERVALS. FINALLY, YOU BELIEVE THAT EVEN IF YOU HAD BREACHED YOUR OBLIGATION UNDER PARAGRAPH 7 OF THE LEASE, THE ONLY REMEDY AVAILABLE TO THE DEPARTMENT WAS A RIGHT TO TERMINATE THE LEASE UNDER PARAGRAPH 10 (C) OF THE LEASE.

THE POST OFFICE DEPARTMENT HAS REPORTED THAT, AT THE TIME OF THE LEASE NEGOTIATIONS, THE PARTIES DID NOT SPECIFICALLY DIRECT THEIR DISCUSSIONS TO THE SUBJECT OF PAINTING, PRESUMABLY BECAUSE THE DEPARTMENT HAS, AS A MATTER OF POLICY, ALWAYS TREATED PAINTING AS THE LESSOR'S RESPONSIBILITY AS PART OF HIS OBLIGATION TO MAINTAIN THE LEASED PREMISES. IT IS FURTHER REPORTED, WITH RESPECT TO THE 5-YEAR INTERVAL FOR PAINTING, THAT THE DEPARTMENT USUALLY REQUIRES INTERIOR PAINTING WHEN THE FACILITIES SHOW A NEED FOR REPAINTING. WHILE UNDER NORMAL WEAR AND TEAR REPAINTING IS USUALLY NEEDED EVERY 5 YEARS, IN THE PRESENT CASE DEMAND WAS NOT MADE UPON YOU FOR INTERIOR MAINTENANCE PAINTING UNTIL SOME 7 YEARS AFTER EXECUTION OF THE LEASE. HOWEVER, THE PARAMOUNT QUESTION IS WHETHER YOU WERE OBLIGATED UNDER THE LEASE TO PAINT THE INTERIOR OF THE PREMISES AT YOUR EXPENSE IN ORDER TO MAINTAIN THE TENANTABLE CONDITION OF THE PREMISES.

PARAGRAPH 7 OF THE LEASE PROVIDES AS FOLLOWS: THE LESSOR SHALL, UNLESS HEREIN SPECIFIED TO THE CONTRARY MAINTAIN THE DEMISED PREMISES, INCLUDING THE BUILDING AND ANY AND ALL EQUIPMENT, AND APPURTENANCES, WHETHER SEVERABLE OR NON-SEVERABLE, FURNISHED BY THE LESSOR UNDER THIS LEASE IN GOOD REPAIR AND TENANTABLE CONDITION, EXCEPT IN CASE OF DAMAGE ARISING FROM THE ACT OR THE NEGLIGENCE OF THE GOVERNMENT'S AGENTS OR EMPLOYEES. FOR THE PURPOSES OF SO MAINTAINING SAID PREMISES AND PROPERTY, THE LESSOR MAY AT REASONABLE TIMES ENTER AND INSPECT THE SAME AND MAKE ANY NECESSARY REPAIRS THERETO.

IN TREATING INTERIOR REPAINTING AS A LESSOR RESPONSIBILITY UNDER THE "GOOD REPAIR" LANGUAGE OF PARAGRAPH 7, THE DEPARTMENT RELIED ON A DECISION OF OUR OFFICE WHICH HELD THAT THE WORD "REPAIR" AS USED HERE IN PARAGRAPH 7 INCLUDES THE PAINTING OF THE INTERIOR OF THE PREMISES. SEE 21 COMP. GEN. 90. THAT CITED DECISION ALSO HELD THAT A LESSOR'S OBLIGATION TO MAINTAIN THE PREMISES IN ,GOOD REPAIR AND TENANTABLE CONDITION" EMBRACES ACTS OF REPAIR TO PREVENT A DECLINE IN THE CONDITION OF THE PREMISES, INCLUDING NECESSARY PAINTING. ALSO, SEE 22 COMP. GEN. 454. WE BELIEVE THAT THE RATIONALE OF THE CITED DECISIONS REQUIRES THE DISALLOWANCE OF YOUR CLAIM.

CONCERNING YOUR VIEW THAT TERMINATION OF THE LEASE IF THE PREMISES BECOME UNFIT FOR USE FOR THE PURPOSES LEASED, IN ACCORDANCE WITH PARAGRAPH 10 (C), WAS THE ONLY REMEDY AVAILABLE TO THE GOVERNMENT WHEN YOU REFUSED TO PAINT THE PREMISES, THE DEPARTMENT HAS ADVISED THAT ITS ACTIONS WERE NOT BASED ON A FINDING THAT THE PREMISES WERE "UNFIT FOR USE.' RATHER, SUCH ACTIONS WERE BASED ON YOUR FAILURE TO PERFORM YOUR MAINTENANCE OBLIGATIONS UNDER PARAGRAPH 7 OF THE LEASE. SINCE PAINTING WAS ONE OF THE LESSOR'S REPAIR OBLIGATIONS UNDER THE LEASE, THE COMMON LAW RIGHT OF SETOFF WAS AVAILABLE TO THE DEPARTMENT TO RECOVER THE COSTS OF REPAINTING. SEE UNITED POST OFFICES CORPORATION V UNITED STATES, 80 CT. CL. 785; 15 COMP. GEN. 1064.